The Role of Savings and Investments in Promoting Economic Growth

The Institute of Certified Investment and Financial Analysts (ICIFA) held its 2nd Annual Conference in March 27th-29th, 2019 at Mombasa, Kenya, under the theme ‘Promoting a High Savings and Investment Culture in Kenya and the Region’.  The conference brought together professional investment and financial analysts serving the financial services industry, which gave the participants a great opportunity to network with key stakeholders and experts in the financial markets from the region. The focus area for the conference was primarily to address the role of the investment professional in boosting the investment culture in Kenya as a key to economic growth.

Professor Murinde presented a keynote speech on the topic ‘The Role of Savings and Investments in Promoting Economic Growth’. The presentation outlined the global trends in savings, investment, equity and bonds, and particularly shed light on the trends of savings, investment and economic growth in Africa. Professor Murinde highlighted the main barriers of doing business in Africa and recommended directions of boosting investment and economic growth respectively.

Professor Murinde pointed out that ‘investment influences the rate of economic growth because it is a component of aggregate demand and influences the productive capacity of the economy. Investment in capital goods (e.g. factories, machines), human capital (e.g. education) and financial capital (e.g. funds necessary to sustain and grow a business) are fundamental elements to be considered.’

Professor Murinde also used evidence gathered from field experiments (RCT) to explain the importance of tackling main constrains imposed upon investment, which include ‘low level of social capital and trust in financial institutions, regulatory barriers, barriers to opening account, and lack of financial literacy’.

‘Innovative financial products are critical for the future of the financial services industry.’ said Professor Murinde.

Here are the five ‘take-away’ points: ‘Saving for financing investment is critical for economic growth; investment analysts and financial analysts here at ICIFA play an important role in reducing opacity in investments decisions; flow of funds framework is an effective tool for identifying where to invest and what to invest; strategies for promoting domestic investment should not be limited to stimulating domestic savings but must also address the non-financial obstacles; fintech is the way forward to provide innovative finance solutions for SMEs and start-ups (entrepreneurship) well beyond the first three years of life – the notorious ‘Valley of Death’, concluded Professor Murinde.

DFID-ESRC ‘Delivering Inclusive Financial Development and Growth’ research project: A Workshop in Honour of Professor Christopher J. Green

An extraordinary research workshop was held at Loughborough University on Friday 25th January 2019, jointly convened by the Centre for Global Finance (CGF) at SOAS and the School of Business and Economics at Loughborough University.

Professor Steven Rothberg, the PVC (Research) at Loughborough University, officially declared the workshop open at 09:30, flanked by Professor Victor Murinde, the Director of CGF. More than 70 researchers, policy makers and practitioners from the UK, Netherlands, France, Canada, Cote d’Ivoire, Bulgaria, Israel, Iran, China, Kenya, Ghana, Nigeria, and Turkey came together to exchange ideas on preliminary research findings from the ongoing research project on ‘Delivering Inclusive Financial Development and Growth’, which is funded by the DFID and ESRC (Research Grant Ref. ES/N013344/2).

Importantly, the workshop was specially dedicated to a member of the research team of the project – Professor Christopher J. Green (Loughborough University), to celebrate his life-long contributions to economics and finance and to pay tribute to his exceptional mentorship of researchers both through his university academic career as well as his active involvement in the critical capacity building dimensions of the African Economic Research Consortium (AERC).

The keynote speech was given by Prof Njuguna Ndung'u, Executive Director of the AERC and former Governor of the Central Bank of Kenya. He eulogised Prof Green’s dedication and contribution to the frontiers of research in economics and finance and to his exceptional contributions to the AERC Network.

‘We should continue the legacy of Prof Christopher Green as we seek to provide answers to these and other questions relating to financial sector development and financial inclusion in developing countries, in general, and Africa, in particular.’ said Prof Ndung’u.

Prof Ndung’u also shared his insights into ‘Gaps, Challenges, and Policy Opinions in Financial Development and Financial Inclusion in Africa’ and suggested three key elements that are fundamental to sustaining the digital evolution for financial development in Africa - ‘Connectivity, interoperability, and electronic ID systems’.

The keynote speech was followed by presentations and discussions of 13 papers from the ongoing research project. These research papers provided preliminary findings on diverse topics in relation to Financial Inclusion and Sustainable Economic Development. To view presentation details, please contact Dr Meng Xie at xm1@soas.ac.uk

In his closing remarks, Professor Green expressed deep gratitude to the workshop organisers and to all participants at the workshop, adding: ‘I have been extraordinarily fortunate to work with so many wonderful people…thank you to all speakers and everyone who has come to this workshop and to all who have made sacrifices and contributions in order to make this day a special one.’

New book: Paths for Sustainable Economic Development: Festschrift for Shubhashis Gangopadhyay

CGF is delighted to share information about a new book: “Paths for Sustainable Economic Development: Festschrift for Shubhashis Gangopadhyay”,  edited by Robert Lensink, Stefan Sjogren and Clas Wihlborg. 

The book contains 30 essays by leading development scholars. https://www.amazon.com/Paths-Sustainable-Economic-Development-Gangopadhyay/dp/9163952157/ref=sr_1_1?s=books&ie=UTF8&qid=1544486530&sr=1-1&keywords=Paths+for+Sustainable+Economic+Development

We congratulate the editors on this new book. We also congratulate Shubhashis Gangopadhyay in whose honour the book is written.

Robert Lensink and Shubhashis Gangopadhyay are Co-Is and Clas Wihlborg is a member of International Advisory Group of the DFID-ESRC funded research project on “Delivering Inclusive Financial Development and Growth” (ESRC Ref ES/N013344/2), which is under the Centre for Global Finance.

This is a path-breaking  book that addresses important aspects of sustainable economic development, with contributions from 40 leading scholars in the areas of finance, economics, law and development.  

New book: Foreign Direct Investment and Economic Development in Africa

This new book explores important aspects of foreign direct investment (FDI) and their linkages to African economies. It contains up-to-date data, interesting case studies, and new empirical findings. It will appeal to policymakers, development agency professionals and researchers. 

A launch ceremony of this new book was hosted by Bourse Régionale des Valeurs Mobilières (BRVM), on the 11th of December 2018, in Abidjan, Côte d'Ivoire. 

Issouf Soumaré is a Co-I of the DFID-ESRC funded research project on “Delivering Inclusive Financial Development and Growth” (ESRC Ref ES/N013344/2), which is under the Centre for Global Finance.   

2018 CBK Banking Symposium

7 December 2018

SOAS Centre for Global Finance (CGF), partnered with the Central Bank of Kenya (CBK), to jointly deliver the 2018 Banking Symposium on Friday, the 7th of December 2018, at the Kenya School of Monetary Studies, in Nairobi, Kenya.

The theme of the Symposium was “Pan-African Banks on the Rise”. The event was attended by the Governor of the CBK (Dr Patrick Njoroge), the Deputy Governor of the CBK (Mrs Sheila M’Mbijjewe), and key stakeholders who have important roles to play in shaping developments in the financial system, industry and commerce, in Kenya, in the context of the rise of Pan-African banks. These stakeholders included bank managers, banking sector regulators, private sector practitioners and researchers.

A team of 20 CGF researchers from Africa, Europe and North America have been looking into the rise of pan-Africa banks and related issues, as part of a research project on ‘Delivering Inclusive Financial Development and Growth’ funded by DFID and ESRC under the DFID-ESRC Growth Research Programme (DEGRP), ES/N013344/2. Their findings provided the material for this symposium, which were presented by Professor Victor Murinde from SOAS University of London, Professor Issouf Soumare from Laval University and ENSEA, Professor Robert Lensink from the University of Groningen, Professor Christopher Green from Loughborough University and Dr Ahmad Hussein Ahmad from Loughborough University. Professor Oliver Morrissey from the University of Nottingham participated in the panel discussion. Other participants from the research project included Professor Christine Oughton, Professor Reinhard Bachmann, Dr Desire Kanga, Dr Ayse Demir, and Dr Meng Xie, all from SOAS University of London. 

Dr Patrick Njoroge, Governor of CBK

At the official opening speech, Governor Njoroge pointed out that Pan-African banks support the strengthening of trade within the continent, provide mechanisms for capital flows and labour movement in the continent, and help in the transfer of new technologies and skills to domestic banks. He observed that Pan-African banks need to be customer-centric, across Africa:

“Being customer-centric is the way to have a sustainable business model”, commented Dr Njoroge.

Mrs Sheila M'Mbijjewe, Deputy Governor of CBK

The Deputy Governor, Mrs Sheila M'Mbijjewe, highly acknowledged that “the transformation of the banking sector in Africa is happening; we should explore the vast opportunities and find solutions to challenges so that we can take advantages of these opportunities and at the same time address the challenges.”

The Deputy Governor concluded that the CBK looks forward to continuing an active partnership with Professor Murinde and SOAS University of London.

Following the DG’s comment on future collaboration, Mr Raphael Otieno, the Director of Research Department at the CBK, reinforced the need of continuing this joint event and embracing a wider scope of participants across Africa.

Professor Victor Murinde, Director of Centre for Global Fiance

Professor Murinde remarked that: “we are very much honoured and grateful to the Central Bank of Kenya for making this event possible. In many ways, the CBK is demonstrating the need for a close collaboration between the researchers that do the theory and generate evidence, and the policy makers that work at the front line of key issues on the daily basis. It is a great opportunity that we can indeed interface with experiences of these policy makers and then invoke, generate or build new theories and test them and see whether the evidence we generate can feed back into policy.”

Professor Victor Murinde spoke about ‘Rethinking national development banks’

AXA Chair in Global Finance - Prof Victor Murinde was invited as a guest speaker at the Foundation for European Progressive Studies (FEPS) book launch in Brussels on 6th November 2018.

The event featured a recent publication of a study on The Future of National Development Banks, presented by Prof Stephany Griffith-Jones and Prof José Antonio Ocampo. This study provides both research and policy-oriented perspectives on how national development banks can make a significant contribution to countries' development, and analyses their roles within broader economic policy, their governance, and the main instruments they use to perform their function. 

Prof Murinde shared his opinions on the key findings of the study and discussed implications for African and other economies.

“The new book, The Future of National Development Banks, published by Oxford University Press 2018, by Stephany Griffith-Jones and José Antonio Ocampo (Editors), is a game changer! 

"The book provides an in-depth study of national development banks in Brazil, Chile, China, Colombia, Germany, Mexico, and Peru.

"This new books offers important lessons, on governance and product innovation, for national development banks in Africa", said, Professor Victor Murinde, AXA Chair in Global Finance and Director of the Centre for Global Finance, SOAS University of London.